am i right in thinking that forex is very diverse?

[fmjvertigo123]

hey guys, how correlated is forex. what makes sense to me is that say GBP/USD and EUR/CHF arent correlated at all and dont react in the same movement. am i right in thinking this?

i've heard that forex trends alot more too, is this correct?

 

[Rhody Trader]

Forex actually isn't that diverse when you boil things down. There are only a handful of very active currencies and the dollar dominates, making your options for having more than a couple uncorrelated positions on at any given time a challenge at best. And to say that GBP/USD and EUR/CHF aren't correlated at all is a dangerous assumption because under flight-to-quality market conditions (for example) the USD and CHF tend to move in the same direction.

As for forex trending more, I haven't seen any specific studies, but does seem to be the general view.

 

[Hoggums]

Pretty much EVERYTHING is correlated. The crash of 2008 proved that, everything asset backed moved downwards together. All ccy pairs made BIG moves.